Precious possessions of Edward VIII and Wallis Simpson, including a frame with an intimidating photograph of Edward's great-grandmother Queen Victoria and jewellery from the couple's exile after he abdicated to marry the American divorcee, are to be auctioned at Sotheby's.

Some of the items are being sold for the third time since the death of Edward in 1972 and of Simpson in 1986.

The first such auction, which lasted for two days in Geneva in 1987, raised £31m – almost 10 times the pre-sale estimate, setting a record for a single-owner jewellery sale that stood for decades. Some pieces set record prices again when they resurfaced at an auction three years ago. The highlight this time, a sapphire and gold bracelet designed by Cartier in the 1940s, is estimated at a mere £180,000, but based on past sales is likely to sell for more.

"She [Simpson] was one of the most stylish women of the day, and there is a lasting fascination with their lives together which shows no sign of going away," said Bryony Meredith, head of Sotheby's jewellery department.

The pieces include a cigarette case that was a Christmas present exactly a century ago, inscribed in a facsimile of the Queen's handwriting, "David [the family's name for Edward] from Mama, Xmas 1913". Another is inscribed "darling David from Mama, God bless you, 1925", and still another "to David from his devoted Father". Edward started smoking on a sea voyage aged 17, and was formally permitted to do so by his father from his 18th birthday.

The fond gifts of cigarette cases – including one inscribed "out of sight, out of mind?" which he gave to an earlier lover, Freda Dudley Ward, who was instantly eclipsed when she introduced him to Simpson – are poignant given smoking would eventually kill Edward's younger brother, who took over the throne as George VI. It also shortened the lives of his father, George V, and grandfather Edward VII – the latter rarely seen off duty without a cigar in hand. The Duke of Windsor himself died of throat cancer.

A silver fob watch with Simpson's handwriting, from Easter 1937, dates from the period they spent apart before her second divorce came through and they were free to marry in a private ceremony unattended by their families.

Edward died 10 days after a historic meeting that partially healed the rift in the family. A photograph shows the present Queen making her only visit to the couple's house in Paris, knowing her uncle was dying. Wallis is wearing a plain dark blue dress, with the sapphire bracelet that is to be sold. The event was is described by the royal biographer Hugo Vickers, In his catalogue note for the auction, the royal biographer Hugo Vickers describes the event as "one of the most significant occasions in her long marriage to the duke".

Other striking pieces of Simpson's jewellery on sale include a necklace made of a twisted rope of coral, also designed by Cartier. She gave a pair of dress clips modelled as jesters to a devoted personal assistant, Anne Seagrim, to whom she once confided that since she was no beauty, she had to be beautifully dressed.

A small folding silver photograph frame, with the number 80 in gold, was a gift to the duke at the age of four from Queen Victoria to mark her 80th birthday. A contemporary recalled that when the boy met the "widow of Windsor" that year, he was so intimidated by her stern expression and head-to-foot black mourning dress that he cried.

The jewellery and possessions are to be auctioned at Sotheby's in London on 12 December.